9.10.120 Prohibition on transfer of commercial cannabis operator permits.
A. Business Restriction to Location on Permit. It shall be unlawful for any person to transfer a commercial cannabis operator permit to a location not specified on the permit, or to operate a commercial cannabis business at any place or location other than that identified on the commercial cannabis operator permit issued pursuant to this chapter.
B. Transfer or Assignment Prohibited. It shall be unlawful and a violation of this chapter to encumber, mortgage, lien, hypothecate, give, bequeath, sell, assign or transfer, by operation of law or otherwise, any portion of the ownership, financial interest, or control of a commercial cannabis business or a commercial cannabis operator permit to any person who does not have a commercial cannabis operator permit from the city. Prior to the effective date of any transfer or other action described in this section, the commercial cannabis operator permittee proposing such an action shall:
1. Notify the city in writing of the proposed action, comply with applicable regulations and provide such information as the city reasonably requests regarding the identity and qualifications of persons involved, and pay all applicable fees and charges; and
2. Provide proof that the proposed lender, lienholder, recipient, heir, buyer, assignee, transferee, or other potential recipient of any portion of the ownership or control, at the time of the notice and effective date of the proposed action, is qualified by the city to apply for a commercial cannabis operator permit and the proposed action is conditioned on the city issuing to the person a new or amended commercial cannabis operator permit.
3. Notify the city in writing within ten calendar days of the action becoming final with the names and contact information of the new persons involved, together with a request that the city issue either a new or amended commercial cannabis operator permit, as applicable.
C. Three-Year Moratorium on Majority Transfer of Ownership. Notwithstanding any other provision of this section, for three years following the date on which the commercial cannabis business activates its commercial cannabis operator permit in accordance with Section 9.10.070(D), no transfer of an aggregate ownership interest of fifty percent or more in a commercial cannabis operator permit will be permitted to any person or combination of persons who were not applicants, owners or financial interest holders of the permit at the time that a commercial cannabis operator permit was awarded. This restriction shall be cumulative, as to each commercial cannabis operator permit. No transfer of any interest is permitted in a commercial cannabis business prior to activating the commercial cannabis operator permit.
D. Prohibition Against Obtaining Ownership in More Than One Storefront Cannabis Dispensary. Notwithstanding any other provision of this section, it shall be unlawful and a violation of this chapter for an owner, permit holder, or financial interest holder of a commercial cannabis retail storefront in the city to be a owner, permit holder, or financial interest holder in any other commercial cannabis retail storefront in the city.
E. Prohibition Against Social Equity Owner Reductions. Notwithstanding any other provision of this section, any transfer of ownership within three years of permit activation that will result in the reduction or elimination of the total number of social equity owners or percentage interest of social equity ownership in a commercial cannabis business from the number or ownership percentage proposed in the original commercial cannabis operator permit applications is prohibited. This prohibition shall include the internal transfer of ownership from one currently permitted operator to another, and transfers of social equity owner interests of any kind require both prior notice and approval of the city to verify compliance with this section. Thereafter, any transfer, at any time, that would result in reduction of the total number of social equity owners proposed in the original application, or that would result in the total social equity ownership percentage in a commercial cannabis business to be reduced below a minimum of two percent, shall be prohibited.
F. Owner and Financial Interest Disclosure. Notwithstanding any other provision of this section, all owners and financial interest holders in any commercial cannabis business shall be disclosed to the city in the application for the operator permit. Any changes to commercial cannabis business owners or financial interest holders shall be disclosed to the city when notification is given to the state.
G. Assignment Null and Void. Any attempt to transfer, sell, assign, give, or lien, or any transfer, by operation of law or otherwise, or any failure to disclose information as required by this chapter, is prohibited and a violation of this chapter, subject to such penalties provided under this chapter or as otherwise provided for violation of the municipal code. Any completed transfer, sale, assignment, gift, or lien, of a commercial cannabis operator permit issued pursuant to the chapter, is prohibited. Any such action immediately shall void, nullify and/or terminate the commercial cannabis operator permit, which shall be of no further force or effect as of the date of any prohibited transfer, sale, assignment, gift or lien. (Ord. 1722 § 5, 2022; Ord. 1647 § 4 (Exh. A (part)), 2018)